CNRL says lower expenses helped offset low oil prices
Aug 4 (Reuters) – Oil and natural gas producer Canadian Natural Resources Ltd (CNRL) reported a smaller quarterly loss on Thursday as lower expenses helped offset a slump in crude prices.
The Calgary-based company also said it is on track to start up the second phase of its Horizon oilsands project, located north of Fort McMurray, in October, ramping up to full production in November.
The third phase of the project is scheduled to start in the fourth quarter of 2017, Canadian Natural said in June.
Once the Horizon project is complete, the company’s capital spending is expected to drop significantly. That will mean more flexibility to improve cash flow, invest in resource development and consider “opportunistic” deals.
“We don’t see any gaps in our portfolio, so we don’t see any need to do acquisitions,” said President Steve Laut on a call with analysts, adding the company does look at all core opportunities and could act if something good showed up.
Canadian Natural, which produces almost all of its natural gas and natural gas liquids from fields in Alberta, British Columbia and Saskatchewan, said cash flow from operations fell nearly 38 percent to C$938 million ($717.5 million) in the second quarter ended June 30.
The company’s net loss narrowed to C$339 million, or 31 Canadian cents per share, from C$405 million, or 37 Canadian cents per share, a year ago.
Adjusted to remove one-time items, the company’s net loss from operations was C$210 million, or 19 Canadian cents per share, compared with a profit of C$178 million, or 16 Canadian cents per share, in the previous year.
Oil and natural gas production fell 2.7 percent to 783,988 barrels of oil equivalent per day (boepd) in the quarter from a year earlier. The company said it expects 2016 production levels to average between 798,000-852,000 boepd.
Canadian Natural, like many companies operating in Canada’s oil sands, was affected by a massive wildfire near Fort McMurray in May that cut total crude output by more than 1 million barrels per day.
Canadian Natural said it has about 176 million cubic feet of gas per day (mmcfd) of gas production shut in due to problems at the Pine River Gas Plant in British Columbia.
Canadian Natural said the third party operator of the Pine River plant is seeking to reinstate gas processing volumes of about 50 mmcfd on Aug. 8, an additional 40 mmcfd by late-September and the remaining 86 mmcfd by December 2016.
The company said it reduced annual gas production guidance to reflect third party outages and is now targeted to range from 1,705 mmcfd to 1,735 mmcfd in 2016.
Shares closed up 3 cents at C$39.46 on Thursday in Toronto.
(Reporting by Julie Gordon in Vancouver, Amrutha Gayathri in Bengaluru and Scott DiSavino in New York; Editing by Gopakumar Warrier, Sunil Nair and Chris Reese)